Existing-home sales retreated for the ninth straight month in October, according to the National Association of REALTORS^®. All four major U.S. regions registered month-over-month and year-over-year declines.

Total existing-home sales,¹ https://www.nar.realtor/existing-home-sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 5.9% from September to a seasonally adjusted annual rate of 4.43 million in October. Year-over-year, sales dropped by 28.4% (down from 6.19 million in October 2021).

“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said NAR Chief Economist Lawrence Yun. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”

Total housing inventory² registered at the end of October was 1.22 million units, which was down 0.8% from both September and one year ago (1.23 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months in October 2021.

“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added. “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.”

The median existing-home price³ for all housing types in October was $379,100, a gain of 6.6% from October 2021 ($355,700), as prices rose in all regions. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 21 days in October, up from 19 days in September and 18 days in October 2021. Sixty-four percent of homes sold in October 2022 were on the market for less than a month.

First-time buyers were responsible for 28% of sales in October, down from 29% in both September 2022 and October 2021. NAR’s 2022 Profile of Home Buyers and Sellers – released earlier this month⁴ – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 26% of transactions in October, up from 22% in September and 24% in October 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in October, up from 15% in September, but down from 17% in October 2021.

Distressed sales⁵ – foreclosures and short sales – represented 1% of sales in October, down from 2% in September and identical to October 2021.

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage was 6.90% in October, up from 6.11% in September. The average commitment rate across all of 2021 was 2.96%.

“Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle,” Yun said.

Realtor.com®’s Market Trends Report(link is external) in October shows that the largest year-over-year median list price growth occurred in Milwaukee (+34.5%), Miami (+25.1%) and Kansas City (+21.4%). Phoenix reported the highest increase in the share of homes that had prices reduced compared to last year (+35.9 percentage points), followed by Austin (+31.2 percentage points) and Las Vegas (+24.4 percentage points).

Single-family and Condo/Co-op Sales

Single-family home sales declined to a seasonally adjusted annual rate of 3.95 million in October, down 6.4% from 4.22 million in September and 28.2% from one year ago. The median existing single-family home price was $384,900 in October, up 6.2% from October 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 480,000 units in October, down 2.0% from September and 30.4% from the previous year. The median existing condo price was $331,000 in October, an annual increase of 10.1%.

“For consumers looking to buy or sell a home, having a REALTOR^® by their side to navigate one of the more challenging and complex markets we’ve seen in some time will be essential to successfully completing transactions,” said NAR President Kenny Parcell, a REALTOR^® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS^® understand local market conditions and provide timely and trusted advice, from listing to closing.”

Regional Breakdown

Existing-home sales in the Northeast trailed off 6.6% from September to an annual rate of 570,000 in October, a decline of 23.0% from October 2021. The median price in the Northeast was $408,700, an increase of 8.0% from the previous year.

Existing-home sales in the Midwest retracted 5.3% from the previous month to an annual rate of 1,080,000 in October, falling 25.5% from the prior year. The median price in the Midwest was $274,500, up 5.9% from October 2021.

In the South, existing-home sales declined 4.8% in October from September to an annual rate of 1,980,000, a 27.2% decrease from this time last year. The median price in the South was $346,300, an increase of 8.0% from one year ago.

Existing-home sales in the West waned 9.1% from September to an annual rate of 800,000 in October, down 37.5% from one year ago. The median price in the West was $588,400, a 5.3% increase from October 2021.

The National Association of REALTORS^® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

# # #

For local information, please contact the local association of REALTORS^® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

NOTE: NAR’s Pending Home Sales Index for October is scheduled for release on November 30, and Existing-Home Sales for November will be released on December 21. Release times are 10 a.m. Eastern.

¹ Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

² Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

³ The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

⁴ Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s REALTORS® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.

⁵ Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s REALTORS® Confidence Index, posted at nar.realtor.

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New single-family home sales rose in November as housing demand was supported by low interest rates and strong consumer demand, despite the ongoing building materials challenges impacting the housing industry.

The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in November at a 744,000 seasonally adjusted annual pace, a 12.4% gain over downwardly revised October rate of 662,000 and is 14.0% below the November 2020 estimate of 865,000.

The gains for new home sales are consistent with the NAHB/Wells Fargo HMI, which edged up to 84 in December, demonstrating that housing is a leading sector for the economy.

Sales-adjusted inventory levels are at a balanced 6.5 months’ supply in November. The count of completed, ready-to-occupy new homes is just 40,000 homes nationwide. Median sales price continues to increase in November at $416,900. This is up 18.8% compared to the November 2020 median sales price of $350,800.

Moreover, sales are increasingly coming from homes that have not started construction, with that count up 75.4% year-over-year, not seasonally adjusted (NSA). These measures point to continued gains for single-family construction ahead.

Regionally on a year-to-date basis, new home sales declined in all four regions; 1.3% in the Northeast, 4.5% in the South, 5.3% in the Midwest, and 12.5% in the West.

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Key Highlights

• Existing-home sales rose 0.8% in October from September to a seasonally adjusted annual rate of 6.34 million, sustaining the growth in sales in the prior month.
• The median existing-home sales price increased 13.1% year-over-year to $353,900.
• From one year ago, the inventory of unsold homes decreased 12% to 1.25 million – equivalent to 2.4 months of the monthly sales pace.

Existing-home sales increased in October, marking two straight months of growth, according to the National Association of Realtors®. Two of the four major U.S. regions saw month-over-month sales climb, one region reported a drop and the fourth area held steady in October. On a year-over-year basis, each region witnessed sales decrease.

Total existing-home sales,[i] https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.8% from September to a seasonally adjusted annual rate of 6.34 million in October. Sales fell 5.8% from a year ago (6.73 million in October 2020).

“Home sales remain resilient, despite low inventory and increasing affordability challenges,” said Lawrence Yun, NAR’s chief economist. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”

Total housing inventory[ii] at the end of October amounted to 1.25 million units, down 0.8% from September and down 12.0% from one year ago (1.42 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, equal to September’s supply, and down from 2.5 months in October 2020.

The median existing-home price[iii] for all housing types in October was $353,900, up 13.1% from October 2020 ($313,000), as prices climbed in each region. This marks 116 straight months of year-over-year increases, the longest-running streak on record.

“Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country,” said Yun. “Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”

Properties typically remained on the market for 18 days in October, up from 17 days in September and down from 21 days in October 2020. Eighty-two percent of homes sold in October 2021 were on the market for less than a month.

In October, first-time buyers were responsible for 29% of sales, up from 28% in September and down from 32% in October 2020. NAR’s 2021 Profile of Home Buyers and Sellers – released earlier this month[iv] – reported that the annual share of first-time buyers was 34%.

Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in October, up from both 13% in September and from 14% in October 2020. All-cash sales accounted for 24% of transactions in October, up from both 23% in September and from 19% in October 2020.

Distressed sales[v] – foreclosures and short sales – represented less than 1% of sales in October, equal to the percentage seen a month prior and equal to October 2020.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in October, up from 2.90% in September. The average commitment rate across all of 2020 was 3.11%.

Single-family and Condo/Co-op Sales

Single-family home sales rose to a seasonally adjusted annual rate of 5.66 million in October, up 1.3% from 5.59 million in September and down 5.8% from one year ago. The median existing single-family home price was $360,800 in October, up 13.5% from October 2020.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 680,000 units in October, down 2.9% from 700,000 in September and down 5.6% from one year ago. The median existing condo price was $296,700 in October, an annual increase of 8.7%.

“At a time when mortgage rates are still low, buying and securing a home is a wise investment,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “NAR will strive to make homeownership obtainable for all who want to pursue one of the key components of the American Dream.”

Regional Breakdown

Existing-home sales in the Northeast fell 2.6% in October, registering an annual rate of 750,000, a 13.8% decline from October 2020. The median price in the Northeast was $379,100, up 6.4% from one year ago.

Existing-home sales in the Midwest rose 4.2% to an annual rate of 1,500,000 in October, a 6.3% decrease from a year ago. The median price in the Midwest was $259,800, a 7.8% jump from October 2020.

Existing-home sales in the South increased 0.4% in October, posting an annual rate of 2,780,000, a 3.5% drop from one year ago. The median price in the South was $315,500, a 16.1% climb from one year prior.

Existing-home sales in the West neither rose nor fell from the prior month’s level, registering an annual rate of 1,310,000 in October, down 5.1% from one year ago. The median price in the West was $507,200, up 7.7% from October 2020.

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

# # #

For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

NOTE: NAR’s Pending Home Sales Index for October is scheduled for release on November 29, and Existing-Home Sales for November will be released December 22; release times are 10:00 a.m. ET.

Information about NAR is available at www.nar.realtor. This and other news releases are posted on the NAR Newsroom at www.nar.realtor/newsroom. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab.

[i] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

[ii] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

[iii] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

[v] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

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Property in France

A Belgian couple living in the department of Tarn have won €128,000 in damages due to a wind farm near their property.

As we have previously reported on these pages, wind farms are a hotly contested topic in France.

In legal cases each year, the courts often rule in favour of opponents, normally on grounds of protection of the environment or historically important buildings.

Less common are victories by complainants on grounds of nuisance from the wind farm, but in a landmark decision in the court of appeal sitting in Toulouse, a Belgian couple have won €128,000 damages on that basis.

The story began in 2004, when the couple purchased an old farmstead in the village of Fontrieu, located in the natural park of Haut-Languedoc.

The couple restored the property, in the process converting 3 farm buildings into gites.

In 2008/9, a wind farm comprising 6 turbines each 58 metres high was installed on land belonging to the local council, with the nearest turbine 700 metres and the furthest at 1300 metres from their property. The minimal legal distance of a turbine from a residential property is 500 metres.

At the time, the couple made no objections against the new development, and until 2013, the couple obtained relief from the sight and noise of the turbines by a wood located between them and the wind farm.

However, following loss of the woodland through felling that year, the couple began to suffer from a range of health problems, which they considered emanated from the noise created by the turbines. The main symptoms were headaches, dizziness, fatigue, tachycardia, and tinnitus.

The couple stated that the lighting of the wind farm was particularly intense: “The wind turbines emit a flash every two seconds. We were forced to illuminate outside to mitigate the effect of the flashes. In addition, they produce a continuous noise equivalent to that of a washing machine. “

The white flashes of light made them “feel like they were in a permanent thunderstorm. It was a really terrifying visual and auditory assault which was even more unbearable at night,” they stated.

The impact of the disturbance from the turbines on their health became so serious that in 2015, on the advice of their doctor, they vacated their farmstead and relocated to a rental property 17 kms away. Within months of doing so their symptoms had disappeared completely.

The couple made complaints to the wind farm operator without success, and those to the local and departmental councils similarly fell on deaf ears.

As a result, in 2015 they brought a legal action against the wind farm operator, but the local tribunal in Castres rejected their complaint, ruling that the noise and visual intrusion from the wind farm was not so abnormal as to constitute a neighbour nuisance (trouble anormal de voisinage).

The couple appealed the ruling to the court of appeal in Toulouse, who in July found in their favour.

During the proceedings the court heard from a range of experts, with those from the wind farm company stating that it could not be established that there was a causal link between infrasound from the turbines and disorders often invoked by the applicants. They considered that the couple may have been under stress caused by the sight of the wind turbines after the woodland was cut down.

Expert witnesses to the court who had reviewed the scientific literature on the health effects of low sound frequencies and infrasound due to wind turbines concluded that there was an illness known as ‘wind farm syndrome’. The symptoms are very diverse, including general (fatigue, nausea), neurological (headache, tinnitus) or psychological (stress, anxiety), among others. They considered the couple were indeed victims of this syndrome.

The court awarded the couple €128,000, made of up damages caused to their health and to the loss of value to their property. As the period to make an appeal has now passed, the ruling is a final one.

In their report, the court expert interestingly pointed out that although the law relating to the installation of wind farms requires the installation not to be the source of airborne or ground noise, giving maximum noise levels, it does not take into account either very low frequencies or infrasound.

Emmanuel Forichon on behalf of the regional campaign group Toutes Nos Énergies, who supported the couple in their action, stated: “These wind turbines allegedly complied with regulatory noise standards: proof if there were any that these standards need to be reviewed.”

The avocat for the couple Alice Terrace stated: “To my knowledge, this case has no precedent”. However, she cautioned that it could not be universally applied. “But be careful,” she stated, “This wind farm causes an abnormal nuisance in its configuration, but each case is particular and must be examined on its merits.”

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Prices paid for goods used in residential construction ex-energy decreased 0.7% in August (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The decrease was largely driven by a decline in lumber and wood products prices and was the first monthly decline since the start of the last recession.  The price index of services inputs to residential construction also decreased in August as smaller gross profit margins of building materials retailers outweighed increases in the prices of freight transportation and other services.

Despite the monthly decline, building materials prices remain 12.3% higher than they were at the beginning of 2021.  Prices increased 2.1% over the same period in 2020.  Similarly, the price of services inputs to residential construction increased 6.6% from January to August 2020 but has already climbed 12.5% thus far in 2021.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) decreased 27.7% in August and has declined 49.0% since May. The steep two-month decrease comes on the heels of an unexpectedly mild 0.7% decline in June that was largely the result of PPI methodology.  The PPI of most durable goods for a given month is largely based on prices paid for goods shipped in the survey month. This can result in lags relative to cash market prices during periods of long lead times.

Although the direction of the index value change is encouraging, the continued volatility is not.  Price volatility remains at an all-time high for a 12-month period.

Ready-Mix Concrete

Prices paid for ready-mix concrete (RMC) rose 1.6% in August.  The index for RMC has risen 5.1% over the past 12 months and 4.7% YTD—the largest year-to-date increase in August since 2006.

Prices rose in every region with the largest increase occurring in the Northeast (+2.9%).  Prices in the Midwest, West, and South increased by 1.9%, 1.7%, and 1.2%, respectively.

 Gypsum Products

The PPI for gypsum products increased 0.5% in August.  The index has increased 14.9% YTD and 22.7% over the past 12 months—the largest such increases since 2004 and 2006, respectively.

Steel Products

Steel mill products prices climbed 5.1% in August following a 10.8% increase in August.  Prices have nearly doubled in 2021, accounting for nearly all of the 111.6% increase since January 2020.

The monthly change in the steel mill products PPI increased by more than 10% only three times (in 1947, 1948, and 2008) over the 80-year period ending in 2020.  Monthly increases have exceeded that mark four times in 2021.

Services

The price of services used as inputs to residential construction decreased 5.7% in August.  The monthly decline was entirely driven by a 7.8% drop in the prices for trade services, the index for which accounts for roughly two-thirds of the PPI for “inputs to residential construction, services.”

The trade services PPI measures changes in the nominal gross margins for goods sold by retailers and wholesalers.  Unsurprisingly, hardware and building materials retailers make up the majority (56.4%) of trade services included as residential construction inputs. The PPI for building materials retailers decreased 11.6% in August while nominal gross margins for building materials wholesalers increased 5.7%.

The price indices for transportation and warehousing and services less trade, warehousing, and transportation increased 0.9% and 0.2%, respectively.  The price of truck transportation of freight increased 0.9% in August and has advanced 9.5% YTD.  Water transportation prices increased 1.3% over the month and have increased 9.0% YTD.

Other Building Materials

The chart below shows the 12-month and year-to-date price changes of other price indices relevant to the residential construction industry.

As Congress continues to work on an infrastructure package, the Construction Materials index is particularly salient.  This index, which has increased 23.9% year-to-date and 32.1% over the past 12 months, is much more heavily weighted with products used in large amounts in the production of “traditional” infrastructure (e.g., roads, bridges, rail).

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After peaking at around $1,700 per thousand board feet in mid-May, lumber prices sank below $1,000 per thousand board feet this week for the first time since late March, according to Random Lengths. Since falling by approximately 23% between September 2020 and November 2020, lumber prices surged into 2021, reaching record levels beginning in March.

Rising prices became a top concern across the construction industry, with numerous industry associations, including the National Association of Home Builders (NAHB) and the National Lumber and Building Material Dealers Association (NLBMDA), pushing government officials to prioritize the issue. The NAHB estimated the significant spike in softwood lumber prices between April 2020 and April 2021 added nearly $36,000 to the price of an average new single-family home and approximately $13,000 to the market value of an average new multifamily home. In addition to the risk the price increases, and related supply-side issues, posed to construction firms, the NAHB estimated the increase in average home prices priced out more than 5.5 million households.

Even as lumber prices soared in May, analysts at BMO Capital Markets projected lumber prices would drop by the second half of the year and return to more typical levels in 2022. The bank cited affordability concerns as the chief reason for expected lumber price reliefs.

“Household wallets are not unlimited and at some point, demand could shrink amid a reluctance to shell out extra dough for the same studs and sheathing,” BMO Capital Markets forecast in May.

Beyond affordability, expanding supply has also contributed to lumber’s recent price decline. U.S. lumber production has increased 5% in the past 12 months, with another 5% increase expected, according to Domain Timber Advisors via Bloomberg.

While prices have begun to decrease, and are trading roughly 40% below their mid-May peak, lumber prices are still up 175% on a year-over-year (YOY) basis, according Business Insider. Analysts project prices will remain “above trend” in the short-term future, despite the recent rapid decline. Speaking with CNBC, Sherwood Lumber COO Kyle Little said while relief is expected over the next six to 12 months, the prices seen will still be “much, much higher than prices we’ve experienced in the recent past.”

While the past week has seen a reprieve on lumber prices, supply-side shortages continue to significantly affect the construction industry. A recent report from the NAHB found the shortage of materials was more widespread than any other period since the association began tracking the issue in the 1990s. The NAHB’s May Housing Market Index (HMI) survey in May 2021 found approximately 90% of builders who buy framing lumber, plywood, and OSB reported shortages. However, shortage issues for builders extend beyond lumber, as sourcing appliances and windows and doors are issues plaguing around 90% of builders, according to the NAHB. A recent survey of the JLC readership also found windows and doors had long wait times, ranging from from about 2-3 weeks to as many as 17 weeks for some readers. Lighting, electrical and plumbing fixtures, cabinets, and appliances were among the other items the JLC readers reported had long lead times.

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